If You Get Behind Don’t…
With the way the mortgage melt down is happening it’s putting many families into debt. Families are turning to there credit cards to help bail them out. What they really need is some debt relief for the situation. Using credit cards can help you get by in tough situations but may hurt your credit and put you further into debt in the long run. Keep in mind that 30% of your credit score is based off of your revolving debt and when you tend to carry more than 50% of your credit limit it looks like you are stretching yourself to thin, which lowers your credit score.
If you look in the right places you can often get 0% APR credit cards or even go through a professional company that can do the credit card consolidation thing. Companies that offer the 0% APR are Discover Card, Capital One, Washing Mutual and Chase. It’s important no matter what route you go you ensure to fully understand the conditions and what will happen. On most of the 0% APR credit card offers if you happen to miss or are late on a payment the 0% APR goes away. The credit card debt reduction companies all have rules they must go by as well so it’s important to look into them.
The federal government has some great tips on how to protect yourself.
Be wary of credit counseling organizations that:
-charge high up-front or monthly fees for enrolling in credit counseling or a DMP.
-pressure you to make “voluntary contributions,” another name for fees.
-won’t send you free information about the services they provide without requiring you to provide personal financial information, such as credit card account numbers, and balances.
-try to enroll you in a DMP without spending time reviewing your financial situation.
-offer to enroll you in a DMP without teaching you budgeting and money management skills.
-demand that you make payments into a DMP before your creditors have accepted you into the program